The Pakistani rupee extended its marginal gains against the US dollar in the interbank market on Wednesday.

The local unit closed the day at 277.11, a gain of Re0.01 against the greenback.

On Tuesday, the Pakistani rupee settled at 277.12 against the dollar.

Internationally, the US dollar stood near this year’s high versus the euro on Wednesday and was poised for the largest monthly rise against it ​for 14 months, powered by US growth and rising US interest rates in contrast to the energy and debt ‌worries swirling in Europe.

Overnight, the euro dipped to its lowest since May 2025, at $1.1312, and traded nearby at $1.1339 in Asia. The euro is also testing support around 178 yen.

Through September the US dollar is up nearly 2.5% on the euro, and the rising greenback also pushed its Australian counterpart below 70 cents for the first time since ​early August.

The dollar also made a 16-1/2-month top on the Swiss franc overnight at 0.8358 francs. The franc has suffered, in part, because investors have ​gone looking for low-yielding alternatives to yen to sell in search of carry elsewhere.

The yen has fallen out of favour as a short against ​the US dollar following US-Japan yen buying in July and August, which has been followed by warnings not to test their resolve, as well as a pickup ‌in the ⁠pace of Japanese rate hikes.

The US dollar has fallen 1.5% on the yen in September.

The Fed’s preferred inflation yardstick, US core PCE, is due out later on Wednesday though the market is focused on Friday’s US jobs report which, if strong, could reinforce expectations that US interest rates are on the rise.

Oil prices, a key indicator of currency parity, rose on Wednesday and were on track for a big monthly gain as US-Iran talks aimed at ending their war stalled and tight fuel markets continued to underpin prices despite recovering Middle East crude supplies.

The Brent futures November contract, which expires on Wednesday, was up 57 cents, or 0.6%, to $103.16 a barrel at 0944 GMT. The more active December contract was up 94 cents to $97.10. US West Texas Intermediate crude was up 82 cents, or 0.9%, to $90.20.

The currency declined 0.7% on the month and 1.2% in the July-September quarter, averting steeper losses largely on the back of persistent interventions by the Reserve Bank of India. On Wednesday, it closed at 95.83 per dollar, up from 95.98 in the previous session.

The South Asian unit navigated a tumultuous quarter, which saw benchmark Brent oil prices swing between $70 per barrel and nearly $110 as conflict between the US and Iran ebbed and flowed.

“While higher oil prices may continue to weigh on the current account, we expect healthier capital flow dynamics and the RBI’s broad policy toolkit, including the potential to raise rates if necessary, to keep the rupee range bound,” analysts at Goldman Sachs said in a note.

The Reserve Bank of India’s monetary policy decision next week is expected to be a key driver, with markets widely anticipating a 25 basis point hike.

The seven-month-old war in the Middle East has also stoked inflation concerns globally, which, alongside worries over developed market government finances, lifted bond yields to multi-year highs, hurting emerging market assets.

The yield on 10-year and 30-year US Treasuries climbed 80 bps and 65 bps, respectively, over the quarter, while Indian bonds fared better, with the yield up only 40 bps locally.

Equities, meanwhile, remained regional underperformers as foreign investors continued to give a cold shoulder to a market without clear AI opportunities. India’s benchmark stock index declined 5% compared to a roughly 1% gain for MSCI’s gauge of regional stocks.

Much of the recent pressure on the rupee has been absorbed by persistent dollar sales by the RBI that helped the currency avert a test of its record low of 96.96 hit in the previous quarter.

Measures to strengthen India’s balance of payments rolled out in June have collectively drawn inflows of $143 billion up to September 18, per central bank data, bolstering firepower to support the currency.

The Indian rupee had declined 0.2% to 96.1475 in early trading but trimmed losses to close nearly flat at 95.98 as Brent oil prices turned lower on the day, after touching a peak of nearly $108 per barrel.

India imports nearly 90% of its crude requirements, making the rupee one of the world’s most vulnerable currencies to the Middle East oil shock.

Dollar sales by state-run banks, most likely on behalf of the Reserve Bank of India, helped limit the local currency’s fall early in the day and sentiment improved when crude prices cooled, traders said.

The focus is squarely on oil and a break below $100 per barrel would take the rupee to 95.40-50 per dollar while current levels should keep it closer to 96, a trader at a foreign bank said.

US and Iranian officials spoke separately with mediators on Monday as part of a renewed effort to end seven months of war, according to officials of both countries. Over the weekend, US President Donald Trump had said that he had rejected a peace proposal from Iran.

The uncertainty has kept oil prices and US Treasury yields elevated, boosting the dollar. On the day, the US 10-year Treasury yield was a touch higher at 5.246% while the dollar index ticked up 0.3% to 101.5.

“We need to see some stability in bonds for the dollar to correct lower. That relies heavily on oil, and the latest news isn’t encouraging. Upside risks are rising again for the greenback,” analysts at ING said in a note.

Investor attention will also be on key US economic data this week, including job openings data due later on Tuesday, in addition to remarks from a number of Fed policymakers to gauge the future trajectory of interest rates in the world’s largest economy.

The local unit closed the day at 277.12, a gain of Re0.03 against the greenback.

On Monday, the Pakistani rupee settled at 277.15 against the dollar.

Finance Minister Muhammad Aurangzeb held a kick-off meeting with the International Monetary Fund (IMF) mission on Tuesday, read a statement released by the Ministry of Finance.

“The IMF mission is in Islamabad for the fourth review of Pakistan’s Extended Fund Facility (EFF) arrangement and the third review of the Resilience and Sustainability Facility (RSF),” it said.

Internationally, the US dollar hovered near a two-month ​high on Tuesday as volatile oil prices and a rapid climb in Treasury yields lent support, although ‌gains were limited as traders awaited US data this week for clues on the Federal Reserve’s rate path.

The euro traded near its weakest level in three months at $1.1367 after the European Central Bank’s chief signalled measured steps to quell inflation. Sterling was steady at $1.3248, also not far ​from a three-month trough.

The dollar index, which measures the US currency against a basket of peers, was ​a touch higher at 101.2 and on track for a 1.8% advance this month, its best ⁠performance since June.

Meanwhile, a deepening selloff ​in US Treasuries pushed yields to new peaks, with the 10-year benchmark at its highest since 2007 and the 30-year at its highest since 2004.

The monetary policy-sensitive two-year yield also rose to its highest in more than two years, closing in on 5%.

US data releases later in the week, including the PCE price index on Wednesday ​and nonfarm payrolls on Friday, ​are both expected to support ⁠the case for further Fed rate hikes.

Markets are now seeing a more than 70% chance of a rate hike from the Federal Reserve at the end of October, up from ​57% a week ago, according to CME Group’s FedWatch tool.

Oil prices, a key indicator of currency parity, declined on Tuesday as investors focused on signs ​of recovering crude exports from the Middle East and lingering concerns over potential supply disruptions in ‌the region stemming from the US-Israeli war on Iran.

Brent crude futures were down $1.96, or 1.86%, to $103.32 a barrel at 1306 GMT. US West Texas Intermediate crude was at $90.65, down $1.95, or 2.11%.

Inter-bank market rates for dollar on Tuesday

BID Rs 277.12

OFFER Rs 277.32

Open-market movement

In the open market, the PKR gained 12 paise for buying and 8 paise for selling against USD, closing at 278.05 and 279.15, respectively.

Against Euro, the PKR gained 76 paise for buying and 71 paise for selling, closing at 315.51 and 318.65, respectively.

Against UAE Dirham, the PKR remained unchanged for buying and gained 2 paise for selling, closing at 75.70 and 76.28, respectively.

Against Saudi Riyal, the PKR gained 1 paisa for buying and 2 paise for selling, closing at 74.02 and 74.52, respectively.

Open-market rates for dollar on Tuesday

BID Rs 278.05

OFFER Rs 279.15

The Pakistani rupee extended its marginal gains against the US dollar in the inter-bank market on Monday.

The local unit closed the day at 277.15, a gain of Re0.01 against the greenback.

During the previous week, the rupee closed at 277.16 against the greenback, a gain of Re0.09 from 277.25 it had closed at a week earlier.

Internationally, the US dollar inched higher to hold near a two-month ​high on Monday, as the US-Iran standoff continued to push up oil prices while investors looked ‌ahead to a data-packed week for more clues on inflation and central banks’ moves.

The euro and sterling were both 0.1% weaker against the dollar, last at $1.1379 and $1.3232, respectively, hovering near multi-month lows against the greenback.

The dollar index, which measures the US ​currency against a basket of peers, was a touch higher at 101.15 and on track for ​a 1.7% gain in September, its best month since June.

The market’s focus is set to turn to US data releases as the week unfolds, with the PCE ‌Index ⁠on Wednesday and non-farm payrolls on Friday both expected to be consistent with further policy tightening.

Currently, markets are seeing a 65% chance of a rate hike from the Fed when the central bank meets next at the end of October, according to CME Group’s FedWatch tool.

Oil prices, a key indicator of currency parity, rose about 2% on Monday after US President Donald Trump rejected a peace deal from Iran to resolve their conflict and reopen the Strait of Hormuz.

Brent futures were up $1.68, or 1.6%, at $106 barrel by 1320 GMT, after hitting their highest since September 15 earlier in the session. US West Texas Intermediate crude was at $94.10 a barrel, up $1.69, or 1.8%.

Inter-bank market rates for dollar on Monday

BID Rs 277.15

OFFER Rs 277.35

Open-market movement

In the open market, the PKR lost 5 paise for buying and 3 paise for selling against USD, closing at 278.17 and 279.23, respectively.

Against Euro, the PKR gained 16 paise for buying and 13 paise for selling, closing at 316.27 and 319.36, respectively.

Against UAE Dirham, the PKR gained 2 paise for buying and lost 1 paisa for selling, closing at 75.70 and 76.30, respectively.

Against Saudi Riyal, the PKR lost 1 paisa for buying and 2 paise for selling, closing at 74.03 and 74.54, respectively.

Open-market rates for dollar on Monday

BID Rs 278.17

OFFER Rs 279.23

Dollar sales from state-run banks, most likely on behalf of the Reserve Bank of India, curbed losses with the rupee settling down 0.2% at 95.9825 per dollar.

Brent crude rose nearly 4% to $108.2 per barrel. US President Donald Trump rejected Iran’s peace plan, but told Axios in a phone interview that he expected US negotiators to engage in more talks this week.

Investors responded by pushing bond yields higher and stocks lower. MSCI’s gauge of Asian stocks fell nearly 1% while stocks in Mumbai declined nearly 1.5% to their lowest level since April.

India imports nearly 90% of its crude requirements, making the rupee one of the world’s most vulnerable currencies to the Middle East oil shock.

“Several investors just have an outright bearish view on all EM Asia high-yield currencies, including the PHP, IDR and INR, given their vulnerability to higher energy costs,” analysts at Goldman Sachs said in a note, summarising feedback from investors located in the UK.

Goldman, meanwhile, says the RBI has the ability to keep the rupee within the 94-97 range, or at least manage the pace of its depreciation.

A glut of capital inflows sparked by policy measures has given the Indian central bank ammunition to go against the tide but investors are keeping an eye on the persistence of that defence. Between June 8 and September 18, these measures drew in $143.6 billion.

“For now, 96 is the floor under INR and it doesn’t seem like the RBI will allow a move past that,” a trader at a foreign bank said.

The company disclosed the development in a number of notices to the Pakistan Stock Exchange (PSX) on Friday.

In a notice to the bourse, TSBL said it intends to apply to the Pakistan Virtual Assets Regulatory Authority (PVARA) for licences covering custody, exchange, and virtual asset transfer and settlement services.

“The proposed applications are being pursued in accordance with the regulatory framework established under the Virtual Assets Act, 2026, which provides for the licensing, regulation and supervision of Virtual Asset Service Providers (VASPs) in Pakistan,” read the notice.

PVARA is the regulatory authority responsible for licensing and supervising VASPs and has prescribed various categories of virtual asset services.

 “The proposed initiative is intended to enable the company to explore opportunities in the emerging virtual asset ecosystem within the applicable legal and regulatory framework,” TSBL said.

“The company has not commenced any such regulated virtual asset services and shall not undertake activities requiring regulatory authorisation unless and until the requisite approvals and licenseş are obtained,” it added.

PVARA was formally approved by the Federal Cabinet on July 8, 2025, as a landmark step to establish a comprehensive legal and institutional framework for the country’s digital assets ecosystem. President Asif Ali Zardari gave his assent to the “Virtual Assets Act, 2025” on July 9, 2025, which officially established PVARA as an autonomous federal body. The

In a separate notice, TSBL said it was considering an initiative to launch a series of Special Purpose Acquisition Companies (SPACs).

“The proposed initiative is intended to enable TSBL to participate in and facilitate opportunities relating to the formation, structuring, public offering and listing of SPACs in accordance with the applicable regulatory framework governing SPACs in Pakistan,” it said.

The board has advised the company to proceed with necessary steps and seek further regulatory clearances and shareholder approvals, TSBL said.

“The proposed SPAC initiative is at a preliminary stage, and no definitive transaction, offering, acquisition or merger has been concluded or approved as of the date of this announcement,” TSBL added.

The local unit closed the day at 277.16, a gain of Re0.01 against the greenback.

On Thursday, the Pakistani rupee settled at 277.17 against the dollar.

Internationally, the US dollar was set for its first back-to-back weekly ​gains in more than three months on Friday, as surging Treasury yields and mounting bets on further Federal ‌Reserve rate hikes kept the greenback near multi-month peaks.

Dollar strength pushed the euro to a two-month low of $1.1370 and put it on track for a third weekly decline, its worst losing streak since the end of 2025. Sterling languished near a three-month low of $1.3220 and was on track for ​its worst weekly performance in four months.

Markets have aggressively repriced the interest rate trajectory after the Fed tightened policy last ​week, while robust economic data and fresh energy supply concerns have further strengthened that conviction. A bond selloff, which ⁠sent long-dated US Treasury yields to their highest in more than 20 years, also gave the greenback a leg up.

The dollar ​index, which measures the US currency against a basket of peers, has climbed more than 1% this week to a two-month high, ​marking its first back-to-back weekly gains since June. However, the rally was losing some momentum, last edging a touch lower at 101.2.

Oil prices, a key indicator of currency parity, fell more than 1% on Friday as markets weighed the possibility of a truce between the US and Iran against concerns that increasing attacks against Saudi Arabia by Houthi fighters could disrupt supply from the key Middle Eastern producer.

Brent was down $1.34, or 1.3%, at $105.26 a barrel at 1215 GMT, while West Texas Intermediate (WTI) was $1.83, or 1.9%, lower at $92.78 a barrel.

For the week so far, Brent has gained 1.5% and WTI has dropped 7.4%.

Inter-bank market rates for dollar on Friday

BID Rs 277.16

OFFER Rs 277.36

Open-market movement

In the open market, the PKR remained unchanged for both buying and selling against USD, closing at 278.12 and 279.20, respectively.

Against Euro, the PKR remained unchanged for buying and gained 23.00 paisa for selling, closing at 316.43 and 319.49, respectively.

Against UAE Dirham, the PKR lost 2.00 paisa for buying and 1.00 paisa for selling, closing at 75.72 and 76.29, respectively.

Against Saudi Riyal, the PKR lost 1.00 paisa for both buying and selling, closing at 74.02 and 74.52, respectively.

Open-market rates for dollar on Friday

BID Rs 278.12

OFFER Rs 279.20

The Indian rupee closed at 95.8125 per dollar, up slightly from its close at 95.9550 in the previous session. The currency was little changed on the week.

Oil prices fell about 2% on Friday, though remained north of $100 per barrel as investors weighed attacks against Saudi Arabia by Houthi fighters against the possibility a truce between the US and Iran amid ongoing diplomatic efforts.

Elevated energy prices have also lifted global bond yields as investors wager that central banks will need to raise borrowing costs to combat inflation.

“Markets remain reluctant to price in any optimism into oil prices, which keeps risks on the upside for rates,” analysts at ING said in a note.

Higher rates exert pressure on risk assets like emerging market currencies and equities. India’s benchmark stock index posted its longest weekly losing streak in six years on Friday.

Persistent intervention by the Reserve Bank of India have, however, contained pressure on the rupee, traders said. The central bank has also used sell-buy swaps to mop up excess rupee liquidity from the banking system.

The swaps, alongside relatively lower liquidity in the forward market and the cutting of stale received positions, pushed dollar-rupee forward premiums up sharply this week, a swap trader at a bank said.

The 1-year forward yield rose as much as 28 basis points in three sessions to touch 3.50% on Friday, its highest level since May.

“Typically, such sharp moves cool off after market positioning gets lighter,” another swap trader at a bank said.

“That should happen (this time too), but global risk factors could keep positioning light for the time being,” the trader added.

The Pakistani rupee extended its marginal gains, appreciating 0.01% against the US dollar in the interbank market on Thursday.

The local unit closed the day at 277.17, a gain of Re0.03 against the greenback.

On Wednesday, the Pakistani rupee settled at 277.20 against the dollar.

Internationally, the US dollar clung to a two-month high on Thursday after a strong manufacturing reading reignited inflation fears and rate-hike bets, while a weak Treasury auction sent yields ​higher across the curve, providing fresh impetus to the US currency.

The broad dollar strength ‌pushed the euro to $1.1378, a two-month low, while sterling languished near a three-month nadir at $1.3231. The dollar index, which measures the US currency against a basket of peers, held near a two-month high at 101.1.

A stronger-than-expected purchasing managers’ report ​overnight fanned new price concerns, and a poorly received auction of five-year U.S. Treasury notes ​triggered a fresh round of bond selling, with five-year yields crossing 5% for ⁠the first time since 2007.

Inflation risks were also amplified by a nearly 4% jump in oil prices on Wednesday after Iran’s president vowed never to surrender, with markets also weighing US President Donald Trump’s diesel export ban.

Traders now see a nearly 70% chance of another increase when the US central bank next meets in October, ​according to CME Group’s FedWatch ​Tool, up from ⁠the 50% probability a week ago.

Oil prices, a key indicator of currency parity, rose more than 1% on Thursday as diplomatic talks between the US and Iran showed little sign of progress, while investors focused on uncertainty about a potential US ban on diesel exports.

Brent crude futures were up $1.63, or 1.58%, at $104.71 a barrel at 1200 GMT, while West Texas Intermediate futures were up $1.34, or 1.49%, at $93.53 a barrel.

Inter-bank market rates for dollar on Thursday

BID Rs 277.17

OFFER Rs 277.37

Open-market movement

In the open market, the PKR gained 5.00 paisa for buying and 2.00 paisa for selling against USD, closing at 278.12 and 279.20, respectively.

Against Euro, the PKR gained 1.02 rupee for buying and 1.03 rupee for selling, closing at 316.43 and 319.72, respectively.

Against UAE Dirham, the PKR remained unchanged for buying and gained 1.00 paisa for selling, closing at 75.70 and 76.28, respectively.

Against Saudi Riyal, the PKR gained 1.00 paisa for both buying and selling, closing at 74.01 and 74.51, respectively.

Open-market rates for dollar on Thursday

BID Rs 278.12

OFFER Rs 279.20

Dollar sales by state-run banks, likely on behalf of the Reserve Bank of India, limited losses and kept the rupee above 96 per dollar.

The currency ended at 95.9550 per dollar, down 0.2% for the day. Earlier in the day, the currency had slipped to 95.96, its lowest level since September 17.

The Iran conflict has weighed on emerging market currencies as elevated oil prices fan inflation in energy-importing economies and strain fiscal health.

A surge in global bond yields has added to the pressure with U.S. Treasury yields hitting multi-year highs as traders added to wagers on rate hikes by the Federal Reserve.

New York Federal Reserve President John Williams said on Thursday it was reasonable to think that the U.S. central bank might need to raise interest rates again before the end of the year to help bring down inflation risks.

The dollar index was a tad higher at 101 while Asian currencies weakened between 0.1% to 0.5%. Indian equities, meanwhile, endured their worst single day drop since early July.

“Periods of low FX volatility always end with a bang and current market conditions are certainly consistent with an increased risk of that scenario materialising. High yielders across EM would suffer most while the yen and Swiss franc would outperform,” MUFG said in a note.

The Indian rupee and Indonesian rupiah are among the high-yielding currencies in Asia and both were under pressure on Thursday.

Despite the headwinds from oil prices and higher global bond yields, near-tenor volatility expectations for the rupee have remained subdued with the 1-month implied volatility gauge hovering around the 4% mark.

The Indian rupee fell 0.1% to 95.74 per dollar from a close of 95.59 in the previous session.

Asian currencies fell 0.1% to 0.3% as investors watched oil prices and Fed rate expectations. The dollar index has risen more than 1% since the Fed raised rates last week as bets on further tightening grew. Interest rate futures markets have baked in about 75 basis points worth of hikes over the next 12 months.

“The US Federal Reserve has started hiking, and markets are pricing in more hikes. If the RBI does not respond, India’s monetary policy misalignment with tightening global financial conditions would widen,” analysts at ANZ said in a note.

“With rate differentials already compressed, that would leave the INR more exposed to any global risk-off episode.”

On Wednesday, dollar sales by state-run banks – most likely on behalf of the Reserve Bank of India – helped limit the currency’s losses, traders said. The central bank also likely conducted dollar-rupee sell/buy swaps to drain excess cash in the banking system.

The swaps were concentrated in the January 2027 maturity while a portion was for October 2027 maturity as well, a trader at a Mumbai-based bank said.

Oil prices, meanwhile, held below $100 per barrel, kept in check by improving Gulf crude supplies and growing hopes for a diplomatic resolution to the US-Israeli war with Iran.

The local unit closed the day at 277.20, a gain of Re0.01 against the greenback.

On Tuesday, the Pakistani rupee settled at 277.21 against the dollar.

Globally, the US dollar steadied near its strongest level in two months on Wednesday ​on prospects of interest rate hikes in the near term, while easing oil prices on hopes for a diplomatic ‌breakthrough to end the Middle East war kept investors on edge.

The euro was at $1.1446 in early trading, loitering near its weakest level since late July. Sterling bought $1.3337. The dollar index, which measures the US currency against six rivals, was at 100.56.

The recent barrage of rate hikes and ​hawkish rhetoric from major central banks has taken centre stage in currency markets as the US-Israeli conflict with Iran ​drives oil prices higher and fans inflation worries.

Investors are now anticipating further tightening from central ⁠banks, with Federal Reserve officials flagging the possibility of more hikes if inflation does not ease.

Investors are also waiting for a high-stakes meeting between Trump and Chinese President Xi Jinping as the two leaders seek stability in a relationship ​under pressure over wide-ranging issues.

The Japanese ​yen was at 157.55 ⁠per US dollar as traders remain wary of the threat of intervention as markets judged the Bank of Japan’s rate hike to a 31-year high last week as insufficiently hawkish.

Oil prices, a key indicator of currency parity, held near their lowest in more than two weeks on Wednesday as improving Gulf crude supplies weighed on the market, though diesel refining margins hit a record high on potential restrictions to US diesel exports.

Brent crude futures rose $1.33, or 1.34%, to $100.58 a barrel by 1303 GMT while West Texas Intermediate futures gained 65 cents, or 0.72%, to $91.17.

Inter-bank market rates for dollar on Wednesday

BID                            Rs 277.20

OFFER                      Rs 277.40

Open-market movement

In the open market, the PKR gained 2.00 paisa for buying and 4.00 paisa for selling against USD, closing at 278.17 and 279.22, respectively.

Against Euro, the PKR gained 1.18 rupee for buying and 88.00 paisa for selling, closing at 317.45 and 320.75, respectively.

Against UAE Dirham, the PKR remained unchanged for buying and lost 2.00 paisa for selling, closing at 75.70 and 76.29, respectively.

Against Saudi Riyal, the PKR lost 1.00 paisa for both buying and selling, closing at 74.02 and 74.52, respectively.

Open-market rates for dollar on Wednesday

BID                            Rs 278.17

OFFER                      Rs 279.22

The Indian rupee rose 0.2% to end at 95.59 per dollar, helped by a 1.5% decline in Brent oil prices to $98.8 per barrel.

Traders pointed to media reports stating that Iran had offered to reopen the Strait of Hormuz, a key energy artery,if the US eases military pressure and lifts its blockade.

Oil prices were higher earlier in the session, weighing on the rupee even as dollar sales by state-run banks helped limit the currency’s fall.

The two-way moves in the currency prompted traders to keep positions small with tight stop-losses, a senior treasury official at a bank said.

“Oil will likely dominate the momentum and while a fall past 96 for the rupee seems unlikely, it could spur a fresh round of dollar buying if it occurs,” the official added.

Sustained Reserve Bank of India action through bond sales and foreign exchange swaps, and its defence of the rupee have helped more than halve the banking system’s liquidity surplus, which was generated by larger-than-expected inflows of $133 billion through the RBI’s diaspora deposit scheme.

On Tuesday as well, the central bank’s spot dollar sales occurred alongside likely sell/buy swaps, which traders said were concentrated in the January 2027 maturity.

“In the near-term, priorities will be to manage liquidity, gradually lower the sizeable forwards book, and support the domestic currency,” said Radhika Rao, a senior economist at DBS.

Elsewhere, global technology shares got a boost from a resurgence of optimism over AI while attention also turned to a high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping later this week.

The Pakistani rupee extended its marginal gains against the US dollar in the interbank market on Tuesday.

The local unit closed the day at 277.21, a gain of Re0.01 against the greenback.

On Monday, the Pakistani rupee settled at 277.22 against the dollar.

Globally, the Japanese yen was under pressure from a firm US dollar on Tuesday as ​traders wagered on policymakers in Japan struggling to keep up with a hawkish turn ‌by global central banks, leaving the country’s interest rates at a wide gap with major peers.

Moves were contained thanks to a holiday in Japan and because of the risk of intervention, after the Nikkei newspaper reported Japan checked dollar/yen rates on Friday. ​Such a move is often a precursor to stepping into the market.

After drifting lower on ​Monday, the yen traded at 157.33 versus the dollar early on Tuesday, while broader ⁠financial markets were buoyed by falling oil prices.

Other currency pairs were mostly steady, with the euro at $1.1467, ​though cryptocurrencies have rallied in the past day to lift bitcoin to an eight-month high above $87,000.

Markets are pricing about a 30% chance that the BOJ hikes its benchmark short-term rate to 1.5% in October and a roughly 55% chance that the Fed will ​lift its funds rate ​window by 25 basis ⁠points to 4% to 4.25%.

The Aussie dollar hovered at $0.7120. Sterling traded around $1.3372.

The New Zealand dollar was pinned near multi-month lows at $0.5708 since Kiwi rates, sitting at 2.75%, are much lower than peers.

Oil prices, a key indicator of currency parity, fell to a two-week low on Tuesday as prospects for Gulf supplies improved, with Iran signaling it could reopen the Strait of Hormuz within seven days and Saudi Arabia set to resume exports from its Red Sea port of Yanbu.

The Brent crude futures November contract was down $2.11, or 2.1%, to $98.23 a barrel at 1151 GMT.

The WTI October contract, which expires on Tuesday, lost $2.48, or 2.59%, to $93.30 a barrel.

The more actively traded November contract was down $2.36, or 2.55%, at $90.01 a barrel.

Inter-bank market rates for dollar on Tuesday

BID Rs 277.21

OFFER Rs 277.41

Open-market movement

In the open market, the PKR gained 4.00 paisa for buying and lost 19.00 paisa for selling against USD, closing at 278.19 and 279.26, respectively.

Against Euro, the PKR gained 22.00 paisa for buying and 30.00 paisa for selling, closing at 318.63 and 321.63, respectively.

Against UAE Dirham, the PKR lost 2.00 paisa for buying and remained unchanged for selling, closing at 75.70 and 76.27, respectively.

Against Saudi Riyal, the PKR lost 2.00 paisa for buying and gained 1.00 paisa for selling, closing at 74.01 and 74.51, respectively.

Open-market rates for dollar on Tuesday

BID Rs 278.19

OFFER Rs 279.26

The Indian rupee closed at 95.8150 per dollar, up slightly from its close at 95.8725 in the previous session.

Asian currencies were mostly range-bound, while regional equities advanced after oil prices fell 2%, as investors hoped for diplomatic progress on the Iran war due to this week’s UN meeting, and eyed a partial recovery in shipments from Saudi Arabia.

Inflows related to the National Stock Exchange of India’s IPO also helped the rupee while dollar bids from importers, including local oil refiners, kept a lid on the size of its gains, traders said.

Meanwhile, dollar-rupee forward premiums eased, with the August 2027 month-end premium down 6 paisa at 2.94 rupees, reflecting the trimming of previously paid positions, as traders assessed whether India will join the global trend of higher benchmark rates as global central banks grapple with inflation.

While the market is pricing in rate hikes by the Reserve Bank of India in the near term, forward premiums would decline sharply if that does not materialise, prompting some participants to trim stale positions, a trader at a state-run bank said.

After the U.S. Federal Reserve raised rates last week, analysts at ING reckon that “the scope to keep pricing a more hawkish Fed after the September FOMC remains a key argument for further US dollar gains.”

“We now expect both the European Central Bank and the Fed to hike rates in December,” ING said.

Traders are currently pricing in a 55% chance of a rate hike at the Fed’s next meeting in October, up from 42.5% a week earlier, the CME FedWatch tool showed.

The Pakistani rupee extended its marginal gains against the US dollar, appreciating 0.01% in the interbank market on Monday.

The local unit closed the day at 277.22, a gain of Re0.03 against the greenback.

During the previous week, the Pakistani rupee appreciated 0.03% to settle at 277.25 against the US dollar in the inter-bank market.

Globally, currency markets focused on the yen on Monday following a sharp drop last week that spurred speculation ​of a rate check from Tokyo, while investors pondered interest-rate outlooks after a wave of hikes from major central banks last ‌week.

The yen was a touch firmer at 156.64 per US dollar after dropping 2% last week. Japan markets were closed for a three-day holiday, leading to low liquidity while keeping traders on alert for an official intervention to prop up the volatile currency.

The euro was little changed at $1.1482 after voting projections showed the far-right Alternative for Germany (AfD) took first place in state elections in northeastern Germany, in a blow to Chancellor Friedrich Merz’s conservative party.

The dollar index, which tracks the US currency against six major peers, was steady at 100.23 after gaining more than 1% last week following the Fed’s ​rate hike, as the central bank signalled more increases could be coming.

Traders are currently pricing in a ​55% chance of a ⁠rate hike at the Fed’s next meeting in October, up from 42.5% a week earlier, the CME FedWatch tool showed.

Oil prices, a key indicator of currency parity, slid towards the psychological threshold of $100 a barrel and to their lowest in 11 days on Monday as investors hoped for diplomatic progress on the Iran war due to this week’s UN meeting, and eyed a partial recovery in shipments from Saudi Arabia.

Brent crude futures and US West Texas Intermediate crude touched their lowest since September 10 earlier on Monday.

The Brent contract for November was at $101.18 a barrel at 1254 GMT, down $2.69, or 2.6%.

The WTI October contract that is expiring on Tuesday also fell $2.69, or 2.7%, to $97.61 a barrel. The November contract stood at $93.49.

Inter-bank market rates for dollar on Monday

BID Rs 277.22

OFFER Rs 277.42

Open-market movement

In the open market, the PKR lost 4.00 paisa for buying and gained 3.00 paisa for selling against USD, closing at 278.23 and 279.07, respectively.

Against Euro, the PKR gained 2.00 paisa for buying and lost 21.00 paisa for selling, closing at 318.85 and 321.93, respectively.

Against UAE Dirham, the PKR lost 3.00 paisa for buying and 2.00 paisa for selling, closing at 75.68 and 76.27, respectively.

Against Saudi Riyal, the PKR lost 4.00 paisa for buying and 5.00 paisa for selling, closing at 73.99 and 74.52, respectively.

Open-market rates for dollar on Monday

BID Rs 278.23

OFFER Rs 279.07

The Indian rupee ended at 95.8750 per dollar, up modestly on the day but logged a 0.3% week-on-week fall.

The US Federal Reserve and the Bank of Japan raised interest rates this week, joining other central banks in hiking rates as the Iran war fans inflationary risks. Higher benchmark borrowing costs are negative for risk assets including emerging market currencies and equities.

Oil prices climbed to near four-month highs earlier in the week but have since cooled on reports that Saudi Arabia was seeking to restore about half the capacity of its East-West oil pipeline within days amid ongoing hostilities in Middle East.

“The next key question for investors is whether the Fed’s policy stance will prompt a similar response from Asia,” DBS said in a note. “We expect India and Philippines to raise rates next quarter, apart from increased odds for Malaysia, while others monitor evolving risks.”

The prospect of higher rates is supportive for the rupee, although traders said that the currency’s depreciation towards the 96 mark has drawn firm central bank intervention over recent trading sessions.

The Reserve Bank of India “is defending 96 quite sternly, making it a line in the sand for the moment,” a trader at a state-run lender said.

Elsewhere, Asian currencies were mixed, while regional stocks gained. India’s benchmark Nifty 50 index rose 0.3%

The National Stock Exchange of India’s $2.3 billion initial public offering was fully subscribed on the second day of bidding, driven by strong demand from foreign and domestic institutional investors. Foreign portfolio inflows are supportive of the rupee.

The local unit closed the day at 277.25, a gain of Re0.01 against the greenback.

On Thursday, the Pakistani rupee settled at 277.26 against the dollar.

Globally, the Japanese yen got off ​to a weak start against the US dollar and the euro at the start of Asian trading ‌on Friday, with currency markets in a subdued mood ahead of an expected rate hike from the Bank of Japan later in the trading session.

The yen fell 0.1% to 156.19 yen per US dollar, resuming its decline after snapping a three-day losing streak on Thursday as traders prepare ​for the Japanese central bank to lift interest rates to the highest level in more than three decades.

The British pound was flat at a 2-1/2-month low of $1.3359 after the Bank ‌of ⁠England held interest rates on Thursday and unexpectedly paused sales of government bonds for six months.

The euro was flat at $1.1478.

The US dollar index, which measures the greenback’s strength against ​a basket of six currencies, was ​flat at 100.2100, after ⁠edging back from a 2-1/2-month high on Thursday.

Traders narrowly expect a hike from the Federal Reserve next month as investors say they are becoming more confident in Chair Kevin Warsh’s ​efforts to reassert the central bank’s independence from the White House.

Fed funds futures are pricing ​an implied 53% ⁠probability of a quarter-point hike at the central bank’s next two-day meeting next month, compared with a 27.2% chance a week ago, according to the CME Group’s FedWatch tool.

Oil prices, a key indicator of currency parity, fell on Friday as easing concerns over Saudi supply disruptions outweighed anxiety about a widening of conflict across the Middle East.

Brent crude futures fell by 88 cents, or 0.84%, to $103.94 a barrel by 1225 GMT. US West Texas Intermediate futures were little changed at $102.15.

Benchmark Brent prices are on track for their first weekly loss in three, down 0.8%.

Inter-bank market rates for dollar on Friday

BID Rs 277.25

OFFER Rs 277.45

Open-market movement

In the open market, the PKR lost 8.00 paisa for buying and 3.00 paisa for selling against USD, closing at 278.19 and 279.10, respectively.

Against Euro, the PKR lost 35.00paisa forbuying and 11.00paisa for selling, closing at 318.87and 321.72, respectively.

Against UAE Dirham, the PKR lost 2.00 paisa for buying and 3.00 paisa for selling, closing at 75.65 and 76.25, respectively.

Against Saudi Riyal, the PKR lost 2.00 paisa for buying and 3.00 paisa for selling,closing at 73.95 and 74.47, respectively.

Open-market rates for dollar on Friday

BID Rs 278.19

OFFER Rs 279.10

The local unit closed the day at 277.26, a gain of Re0.01 against the greenback.

On Wednesday, the Pakistani rupee settled at 277.27 against the dollar.

Internationally, the US dollar clung to a seven-week high on Thursday after the ​Federal Reserve raised interest rates and flagged more hikes in coming months, while investors awaited ‌decisions from the Bank of England later and the Bank of Japan on Friday.

The US dollar ripped higher alongside US Treasury yields, after new central bank chief Kevin Warsh joined a unanimous decision to hike interest rates, while officials validated a hawkish ​path and projected one more increase in 2026.

The US dollar’s ​strength pushed the euro to $1.1456, near a seven-week low, while sterling was flat at $1.3377 ahead of the Bank of England’s meeting later on Thursday.

At 156.20 per US dollar, the yen hovered near a two-week low as markets awaited the Bank of Japan’s ​decision on Friday.

The dollar index, which measures the greenback against a basket of currencies, last traded at ​100.33, the strongest level since July 31.

Rate futures markets now ‌reflect about ⁠a 90% probability of a follow-up quarter-percentage-point Fed rate hike by the end of this year, according to CME Group’s FedWatch Tool.

Oil prices, a key indicator of currency parity, eased about 3% on Thursday to a one-week low, extending losses as reports of additional Saudi crude cargoes through Oman eased supply concerns, though prices stayed above $100 a barrel on fears the Middle East conflict could widen.

Brent crude futures were down $3.85, or 3.64%, to $101.98 a barrel at 1000 GMT, after touching their lowest level since September 10, while US West Texas Intermediate futures were down $3, or 2.93%, at $99.43 a barrel, their lowest level since Sept. 11. Both contracts fell about $3 on Wednesday.

Inter-bank market rates for dollar on Thursday

BID Rs 277.26

OFFER Rs 277.46

Open-market movement

In the open market, the PKR gained 1.00 paisa for buying and 13.00 paisa for selling against USD, closing at 278.11 and 279.07, respectively.

Against Euro, the PKR gained 1.56 rupee for buying and 1.37 rupee for selling, closing at 318.52 and 321.61, respectively.

Against UAE Dirham, the PKR lost 1.00 paisa for buying and remained unchanged for selling, closing at 75.63 and 76.22, respectively.

Against Saudi Riyal, the PKR lost 3.00 paisa for buying and 1.00 paisa for selling, closing at 73.93 and 74.44, respectively.

Open-market rates for dollar on Thursday

BID Rs 278.11

OFFER Rs 279.07

The Indian rupee closed at 95.93 against the dollar, barely changed from Wednesday’s close at 95.9550.

While the rupee had slipped past the 96-per-dollar mark in early trading, it recouped losses following market intervention and inflows likely linked to the rebalancing of a global equity index.

“Price action signals that the central bank is not comfortable with the rupee falling past 96, so that could remain a key support level in the near term,” an FX salesperson at a foreign bank said.

Asian currencies mostly declined between 0.1% and 0.6% after the Federal Reserve raised rates and reaffirmed its commitment to curbing inflation, lifting short-dated U.S. yields to their highest level in over two years.

The dollar index was anchored above the 100 mark, after rising nearly 0.7% in the previous session.

“The dollar can count on a stronger floor after the Fed raised rates and signalled another hike is likely by year-end,” ING said in a note.

“As long as oil remains supported, it’s hard to argue against the bullish USD momentum,” ING added.

Brent crude was down about 1% at $104.8 as reports of additional Saudi crude cargoes through Oman eased supply concerns, even as worries over the Middle East conflict lingered.

Meanwhile, traders said that the Reserve Bank of India also likely conducted dollar-rupee sell/buy swaps to drain excess rupee liquidity from the banking system. The central bank’s open market debt sale, conducted for the same purpose, also absorbed cash from the banking system equivalent to nearly 0.2% of total deposits on Thursday.

Oil prices eased modestly but remained north of $100 per barrel with likely central bank intervention helping the South Asian unit withstand pressure from multiple directions.

The Indian rupee closed flat at 95.9550 per dollar after touching a low of 95.9750 per dollar, its weakest level since July 27.

Persistent interventions by the Reserve Bank of India have helped the rupee hold above the 96 per dollar mark over recent sessions.

Regional currencies were mostly subdued with the U.S. dollar index near multi-week peaks ahead of a widely Fed rate hike.

Investors will parse the FOMC statement and Fed Chair Kevin Warsh’s press conference for clues on whether the central bank will treat any rate hike as sufficient or signal further tightening ahead.

“A hawkish Fed outcome could increase pressure on the rupee and we have see the 96 level break if that happens,” a trader at a foreign bank said.

Interest rate futures markets are pricing in a 92.5% probability of a 25-basis-points increase when the Fed announces its decision later today while swap markets have baked in about 60 bps worth of rate increases over the remainder of the year.

“We expect the FOMC to make only the minimum necessary change to its statement, which will likely note that it is hiking to return inflation to 2% but will likely avoid providing guidance on the path forward or the criteria for further hikes,” analysts at Goldman Sachs said in a note.

The Pakistani rupee extended its marginal gains, appreciating 0.01%, against the US dollar in the interbank market on Wednesday.

The local unit closed the day at 277.27, a gain of Re0.03 against the greenback.

On Tuesday, the Pakistani rupee settled at 277.30 against the dollar.

Internationally, the US dollar was hanging on to recent gains on ​Wednesday and trading near multi-week highs on a handful of major peers ahead of a Federal Reserve decision where traders expect ‌the first of what could be several US interest rate hikes.

The US dollar had advanced along with yields overnight, running furthest against the ⁠yen and New Zealand dollar, leaving the kiwi to hit a two-month low of $0.5749 in Asia morning trade and the yen at a one-week ​low of 155.43 per dollar.

At $1.1535, the euro was not far from Monday’s one-month low of $1.1523, while sterling, at $1.3470, was not far above a six-week ​trough of $1.3464 it had made on Monday.

Currency markets haven’t really moved that much while global bond yields have been climbing in concert over recent weeks because sovereign bonds have moved in tandem and not shifted relative differences between countries’ yields very far.

But the dollar’s gained traction in the last few sessions on thinking that ​despite Warsh being hired by President Donald Trump to cut interest rates, he’ll need to hike a few times to show the Fed is ​serious about taming inflation that is being fanned by war with Iran and the resulting energy price surge.

Oil prices, a key indicator of currency parity, fell on Wednesday as reports that Saudi Arabia was offering additional crude cargoes via Oman eased concerns about the scale of Middle East supply disruptions, while European diesel prices hovered near a record high.

Brent crude futures were down $1.30, or 1.2%, at $107.45 a barrel by 1307 GMT.

U.S. West Texas Intermediate futures were down $1.96, or 1.85%, at $103.87.

Inter-bank market rates for dollar on Wednesday

BID                            Rs 277.27

OFFER                      Rs 277.47

Open-market movement

In the open market, the PKR gained 4.00 paisa for buying and lost 18.00 paisa for selling against USD, closing at 278.12 and 279.20, respectively.

Against Euro, the PKR lost 9.00 paisa for buying and 35.00 paisa for selling, closing at 320.08 and 322.98, respectively.

Against UAE Dirham, the PKR lost 2.00 paisa for buying and 6.00 paisa for selling, closing at 75.62 and 76.22, respectively.

Against Saudi Riyal, the PKR lost 2.00 paisa for buying and 1.00 paisa for selling, closing at 73.90 and 74.43, respectively.

Open-market rates for dollar on Wednesday

BID                            Rs 278.12

OFFER                      Rs 279.20

The Indian rupee settled at 95.9550 per dollar, down xx% on the day, its biggest one-day fall since mid-July.

Brent crude rose more than 2% to $108.20 a barrel, raising concerns about a wider Indian trade deficit and higher inflation.

Data on Tuesday showed that India’s goods trade deficit was narrower than anticipated in August, largely on account of a drop in gold imports, at $26.8 billion against economist expectations of about $32 billion.

Meanwhile, signs of broadening inflation have prompted traders to add to wagers on a rate hike by the Reserve Bank of India next month.

Both Citi and Deutsche Bank brought forward rate hikes calls from December to October.

This also weighed on government bonds with the benchmark 10-year bond yield climbing to its highest since mid-May.

Stocks were under pressure as well with the benchmark Nifty 50 index ending lower by about 1%.

“A gradual broadening of price pressures is likely to keep inflation readings above 5% in second half of the fiscal year, underscoring the need for a tighter (monetary) policy bias,” Radhika Rao, senior economist at DBS said in a note.

She expects the goods trade deficit to remain around $30 billion as stronger exports are offset by a further widening in the energy import bill.

In addition to oil prices, focus is also on the U.S. Federal Reserve’s policy decision on Wednesday with markets pricing a 93% chance of a hike. The Bank of Japan is also expected to raise rates on Friday.

The Pakistani rupee extended its marginal gains against the US dollar in the interbank market on Tuesday.

The local unit closed the day at 277.30, a gain of Re0.01 against the greenback.

On Monday, the Pakistani rupee settled at 277.31 against the dollar.

Internationally, the US dollar inched up to trade near a two-week high on Tuesday ​as surging oil prices lifted Treasury yields and reinforced expectations that the Federal Reserve will raise interest ‌rates this week.

It also gained support as risk appetite weakened after stock markets tumbled, with AI-related shares under pressure after industry leaders called for slower development to contain potential threats to humanity.

Markets now see a Fed hike on Wednesday as a near certainty, with CME’s FedWatch tool ​pricing in a roughly 93% chance of an interest-rate increase, which would be the first in more than ​three years.

Near-term support may persist, but with ​a hike now heavily priced in, further dollar upside will likely require the Fed to keep the door open to additional ​tightening, he added.

The dollar index, which measures the greenback against a basket of currencies, was last at 99.55.

The euro was slightly weaker against the dollar at $1.1538, as was sterling at $1.3494.

The yen also pulled away from a seven-month high, last down roughly 0.2% at 154.72 ahead of ​an expected Bank of Japan rate hike on Friday.

Oil prices, a key indicator of currency parity, edged higher on Tuesday after attacks on Saudi Arabian energy infrastructure left the kingdom’s East-West Pipeline offline, raising fears that damage to energy infrastructure and transport routes could take longer to repair.

Brent crude futures were up 6 cents at $105.74 a barrel at 1301 GMT after hitting a session high of $108.43. U.S. West Texas Intermediate futures were up 27 cents at $101.66 a barrel after rising as far as $104.21 earlier.

Concerns over oil supplies intensified after Houthi forces in Yemen launched fresh attacks on Saudi Arabia on Monday, while Gulf Arab states postponed planned discussions with Iran.

Inter-bank market rates for dollar on Tuesday

BID Rs 277.30

OFFER Rs 277.50

Open-market movement

In the open market, the PKR gained3.00 paisa for buying and 11.00 paisa for selling against USD, closing at 278.16 and 279.02, respectively.

Against Euro, the PKR gained 61.00paisa for buying and 1.31rupee for selling, closing at 319.99and 322.63, respectively.

Against UAE Dirham, the PKR gained 3.00 paisa for buying and 11.00 paisa for selling, closing at 75.60 and 76.16, respectively.

Against Saudi Riyal, the PKR gained 6.00 paisa for both buying and selling,closing at 73.88 and 74.42, respectively.

Open-market rates for dollar on Tuesday

BID Rs 278.16

OFFER Rs 279.02

The Pakistani rupee extended its marginal gains against the US dollar in the interbank market on Monday.

The local unit closed the day at 277.31, a gain of Re0.01 against the greenback.

On Friday, the Pakistani rupee settled at 277.32 against the dollar.

Internationally, the US dollar was steady on Monday ​with the Japanese yen holding on to its recent sharp gains and hovering near a seven-month high as investors pondered possible rate hikes from ‌the Federal Reserve and Bank of Japan in a pivotal week for monetary policy.

Global policymakers are grappling with erratic pricing pressures from the six-month-long US-Israeli war on Iran that has pushed oil prices well above $100 per barrel and upended the path for rates amid bouts of selloffs in long-end bonds.

The European Central Bank raised rates last week and warned of further hikes, setting the stage for the Fed policy ​decision on Wednesday and a widely expected rate hike from the BOJ on Friday.

The Bank of England is expected to stand pat on ​Thursday, but the voting is likely to be close.

Traders ramped up bets for a Fed rate hike after data on ⁠Friday showed US consumer prices accelerated in August; they priced in an 86% chance of an increase this week and another move higher later in the year, ​the CME FedWatch tool showed.

The euro was recently at $1.159, while sterling last bought $1.3524.

The US dollar index, which measures the greenback against six other units, was steady at 99.15 after two straight weeks of meagre declines.

Oil prices, a key indicator of currency parity, rose more than 3% on Monday, after new Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf compounded supply concerns following the closure of a key Saudi oil pipeline.

Brent crude futures rose $3.21, or 3.1%, to $107.82 per barrel as of 0340 GMT.

WTI futures gained $3.17, or 3.2%, to $103.22 per barrel.

Inter-bank market rates for dollar on Monday

BID Rs 277.31

OFFER Rs 277.51

Open-market movement

In the open market, the PKR gained 3.00 paisa for buying and lost 8.00 paisa for selling against USD, closing at 278.19 and 279.13, respectively.

Against Euro, the PKR gained 1.51 rupee for buying and 1.10 rupee for selling, closing at 320.60 and 323.94, respectively.

Against UAE Dirham, the PKR gained 3.00 paisa for buying and 1.00 paisa for selling, closing at 75.63 and 76.27, respectively.

Against Saudi Riyal, the PKR gained 2.00 paisa for buying and remained unchanged for selling, closing at 73.94 and 74.48, respectively.

Open-market rates for dollar on Monday

BID Rs 278.19

OFFER Rs 279.13

India’s FX pile has risen for ten straight weeks, jumping by almost $120 billion during this period, with the latest data showing a nearly $45 billion week-on-week rise.

In June, India unveiled a raft of measures to boost dollar inflows that included discounted hedging facilities for overseas borrowings by state-run firms and banks as well as a free-of-cost hedging facility for banks to raise overseas FX deposits.

The Reserve Bank of India received $136.3 billion under these schemes between June 5 and August 31, led by a much higher-than-anticipated $127 billion haul from non-resident Indian deposits.

The scale of inflows prompted the central bank to shorten the window for its deposit hedging facility for overseas deposits by a month to August-end.

India’s forex reserves hit record $729 billion on sustained capital inflows

For the week ended September 4, the rise in reserves was led by a $47.4 billion gain in the central bank’s foreign currency assets, while the value of its gold holdings dipped by about $2.6 billion to $113.8 billion.

The RBI’s frequent interventions in the foreign exchange market to support the rupee have likely offset the impact of some of the overseas dollar inflows, bankers said.

Analysts have also pointed out that while the dollar inflows boost the RBI’s spot FX reserves, they are reflected as a future liability in its forward book.

“Should the RBI elect to bring forward existing dollar sales in the upto 12-month horizon, the headline reserves will likely stabilize around $750 billion,” said Tanay Dalal, an economist at Axis Bank.

Foreign exchange reserves (in million U.S. dollars)

The Indian rupee declined 0.1% to end at 95.55, weakening for the fourth straight day. On the week, it declined 1.1%, the sharpest fall since mid-May when surging oil prices had pushed it to a record low of 96.96.

Oil prices were set to end the week above $100 a barrel for the first time since mid-May, though they edged lower on Friday after the Financial Times reported that Middle East foreign ministers were seeking a temporary deal on shipping through the Strait of Hormuz.

Higher oil prices and global bond yields have weighed on the rupee this week, erasing much of an early-September rally that took it to a two-month high near 94.30 per dollar.

“We will need to support the forex markets,” RBI Governor Sanjay Malhotra said in a media interview aired on Friday, referring to how the central bank’s potential dollar sales would aid the drainage of excess INR liquidity from the banking system.

The RBI is “not taking any tools off the table” to manage liquidity and keep the overnight rate aligned with the key repo rate, Malhotra said, pointing to open market bond sales and FX swaps among the options.

Traders said the central bank had likely conducted dollar-rupee sell/buy swaps on Friday for the third consecutive session, as a measure to drain excess cash.

Elsewhere, markets turned their focus to upcoming U.S. consumer inflation data due later on Friday. The data will impact the case for a Fed rate hike next week. Forecasts are centred on a 0.2% monthly rise in the core measure of CPI, although risks are seen skewed towards a higher number.

“We don’t think the bar is high for today’s CPI to endorse a Fed hike next week,” ING said in a note.

The local unit closed the day at 277.32, a gain of Re0.03 against the greenback.

On Thursday, the Pakistani rupee settled at 277.35 against the dollar.

Also read: Rupee to hold at Rs278/USD in 2026 as Pakistan’s FX buffers improve: BMI

Internationally, the US dollar held near its highest-​levels of the past week and the yen slipped for a second day at the start of Asian ‌trading on Friday as renewed fears of energy supply disruptions in the Middle East pushed up bond yields and oil prices.

The US dollar index, which measures the greenback’s strength against a basket of six currencies, was trading at 99.081, holding steady after gaining 0.3% on Thursday to reach its highest level since September 7.

The rise followed the release of data showing US producer prices increased 0.4% in August, meeting ​market expectations as energy prices rebounded during the month.

Oil prices, a key indicator of currency parity, fell on Friday but remained on course for a weekly gain of more than 8% while US diesel prices ‌hit a record high as attacks along Middle East shipping routes stoked concerns about prolonged supply disruptions.

Brent crude futures were down $3.28, or 3.05%, to $104.35 a barrel at 1309 GMT.

Inter-bank market rates for dollar on Friday

BID Rs 277.32

OFFER Rs 277.52

Open-market movement

In the open market, the PKR gained 2 paise for buying and 3 paise for selling against USD, closing at 278.22 and 279.05, respectively.

Against Euro, the PKR gained 75 paise for buying and 71 paise for selling, closing at 322.11 and 325.04, respectively.

Against UAE Dirham, the PKR gained 1 paisa for buying and lost 2 paise for selling, closing at 75.66 and 76.28, respectively.

Against Saudi Riyal, the PKR lost 2 paise for buying and 1 paisa for selling, closing at 73.96 and 74.48, respectively.

Open-market rates for dollar on Friday

BID Rs 278.22

OFFER Rs 279.05

The firm now expects the rupee to remain around Rs278/$ through 2026, before weakening to Rs292/$ by end-2027 as concerns over export competitiveness and the widening trade deficit put pressure on the currency.

“We now expect policymakers to hold the rupee at around PKR278/USD through 2026, instead of devaluing the currency to PKR288/USD by year-end as we previously forecast,” read the report.

BMI noted that the near-term risk of a disorderly devaluation has eased with Pakistan’s FX buffers continuing to improve despite higher energy import costs and sizeable external debt repayments.

“We expect policymakers to devalue the rupee to around PKR292/USD by end-2027 to restore export competitiveness,” it said.

SBP projected to bring down policy rate to 16% by 2024-end: Fitch Solutions’ BMI report

BMI said that the rupee’s real effective exchange rate rose to an eight-year high of 107.9 in July, which is eroding export competitiveness, while making imports more attractive.

The imbalance is already visible in the merchandise trade deficit, which widened by 34.6% from USD29.4bn in FY24/25 to USD39.6bn in FY25/26, it said.

“Strong remittance inflows have so far prevented a sharper deterioration in the external position, but are unlikely to offset a widening trade deficit indefinitely. We therefore expect policymakers to place greater weight on supporting exports and growth, with easing inflationary pressures in H2 2027 creating room to devalue the currency,” BMI said.

The research firm said that a tight monetary policy should support the rupee.

It highlighted that the State Bank of Pakistan (SBP) raised its policy rate by 100 basis points to 11.50% in April as inflation accelerated following the US-Iran conflict.

“Although higher global energy and food prices should keep inflation above the SBP’s 5-7% target for the rest of FY2026/27 (July-June), we expect the SBP to stand pat to avoid placing additional pressure on growth.

Even so, the current policy rate remains well above the 7.00% seen before the 2022-2023 balance-of-payments crisis, helping to discourage capital outflows and support currency stability. A stable exchange rate should, in turn, help contain imported inflation and anchor medium-term inflation expectations,” BMI said.

It warned that a prolonged or more severe escalation of the US-Iran conflict will likely keep global energy prices higher for longer. “A sustained increase would widen the import bill, weaken its external position and increase the risk of a devaluation,” BMI said.